Budget woes preoccupy legislators

The 2009 Iowa Legislative session is scheduled to begin this morning at 10 o’clock. With a declining economy, state tax revenues are down. It means legislators won’t be creating new state initiatives and may, instead, be forced to shut down some programs.

Senate Democratic Leader Mike Gronstal of Council Bluffs says there are tough decisions ahead. "The budget challenges that the state faces are real and large," Gronstal says, "and we’re going to have to deal with those."

In December Governor Chet Culver, a Democrat, ordered an across-the-board cut in the state budget and Gronstal says some of the "nice" things that state government’s doing are perhaps "extras" which can be cut. "Nobody likes across the board cuts. Nobody likes the cuts at all," Gronstal says. "We have very challenging budget circumstances that we’re facing and we’re going to have to say, ‘No,’ to a lot of people this year."

The top Republican in the Iowa Senate says every agency in state government should have their budget cut in half. If the directors of state agencies want more, Senate Republican Leader Paul McKinley says they should have to present a convincing argument to legislators and "justify" getting more money. "I believe we need to look at every agency, every department from top to bottom," McKinley says.

House G.O.P. Leader Kraig Paulsen of Hiawatha says Republicans will be "budget hawks" in the next few months, armed with lots of suggestions for budget cuts. "Republicans are ready to sit down, take a look at where the state stands and look forward," Paulsen says. "We don’t have to look back. I don’t think getting into a blame game is necessarily helpful."

Gronstal says some of his fellow Democrats have been offering budget cutting ideas, too. "I think there’s going to be a lot of energy this session spent looking at how to more efficiently do things in state government," Gronstal says, "and to look at those things that maybe are nice that state government does, but aren’t necessary…they’re kind of extras…In tough times you say, ‘Maybe that’s something we should stop doing.’"

On Tuesday, Governor Culver plans to unveil a "big and bold" plan to borrow money to finance public works projects in Iowa — similar to the spending included in the stimulus package President-elect Obama has been crafting. Gronstal, the top Democrat in the state senate, is cautious about borrowing for roads and bridges. "It makes sense to borrow if it’s for an asset that you’re going to need. If it’s part of a regular building process, like the transportation network — the highway system in this state, you create a boom and bust cycle of some years when you spent a heck of a lot of money ’cause you issue bonds and other years when it’s flat," Gronstal says. "In the overall scheme of things, that’s not the best way to operate."

But Gronstal sees borrowing to fix up areas of the state that were hit by tornadoes and flooding as a onetime situation. "That’s an area that I think some of us are open to borrowing on," Gronstal says.

Paulsen, the Republican leader in the Iowa House, says borrowing money to pay for infrastructure projects is nothing new, but Paulsen says Republicans have concerns about borrowing for general road and bridge construction. "If you’re talking about some particular disaster relief project then, yeah, that is something that probably needs to be part of the discussion," Paulsen says.

Paulsen is open to borrowing for disaster relief projects. Paulsen, who represents a small portion of Cedar Rapids and the entire city of Palo which was swamped with water, hopes an initial round of disaster relief moves through the legislature in early February, without partisan squabbles bogging it down.

Another budget-related issue legislators are mulling is the idea of selling or leasing the Iowa Lottery to a private company that would provide a huge, up-front payment of millions and a promised cut of future Lottery profits. McKinley, the Republican leader in the state senate, accuses Democrats who’re considering selling off the state lottery of "desperation."

"I look at the governor and the Democratic majority as a little bit like the family that bought more house than they can afford and now they’re having to sell the furniture in order to support it," McKinley says. Democrats say in a year when the budget is tight, all options should be considered and that includes selling the Lottery.